Vestbee, Europe’s leading platform for startups, VCs, accelerators, and corporates, has just released its VC Funding in the CEE Report for Q2 2024. The latest report highlights a significant increase in venture funding in Central and Eastern Europe, with investments reaching €940 million across over 150 rounds, despite ongoing challenges and persisting market uncertainties.

Funding highlights in CEE for Q2 2024

While the total funding value saw a substantial rise from €560 million in Q2 2023 to €940 million in Q2 2024, the number of funding rounds decreased by 35%, from over 250 in Q2 2023 to over 150 rounds this quarter. This dichotomy signals the CEE ecosystem’s continued reliance on fewer, larger deals, which accounted for nearly 70% of the raised capital. 

Mega-rounds for companies such as a no-code CRM Creatio, an online grocery delivery platform Rohlik, and a satellite technology provider ICEYE were significantly driving momentum in the market. The scarcity of smaller rounds in the region reflects ongoing challenges in securing investments due to harsh economic conditions, reduced foreign funds activity, and a pause in public funding programs.

While the increase in total funding is a positive sign, Vestbee’s CEO and VC investor, Ewa Chronowska, cautions that the CEE region remains vulnerable to macroeconomic fluctuations and geopolitical challenges. “Although we’ve seen growth in overall investment, the decrease in the number of rounds signals that early-stage startups still face significant challenges in raising capital. The market remains uncertain, but there’s a palpable sense of anticipation in Central and Eastern Europe, with stakeholders eagerly awaiting a trigger that will reignite investor interest in the region and propel the market to the funding levels seen in 2019-2020,” she notes.

Regional leaders and sectoral trends

Poland, Estonia, and Ukraine led the CEE region in terms of the number of funding rounds, accounting for nearly 55% of the total investment for the quarter. The countries recorded 39, 26, and 18 rounds respectively. The Czech Republic also played a key role, particularly through Rohlik’s round of €160 million, contributing over 20% of the region’s total funding.

The top sectors that garnered the most attention from investors in Q2 2024 were Enterprise Software, e-commerce, AI, energy, financial services, and SaaS. They only partially reflect larger global trends, as both in Europe and worldwide it was AI that emerged as a top-funded industry. 

What is more, Coinvest Capital, Fiedler Capital, BADideas.fund, FIRSTPICK, Fortech Investments, Morningstar Ventures, Tera Ventures, Underline Ventures and Earlybird VC established themselves as one of the most active VC funds in the region. 

Notable deals in Q2 2024

Ukrainian-founded, US-based startup Creation secured €180 million in a venture round, marking it the largest disclosed investment. It was followed closely by another mega round of €160 million raised by Czech’s Rohlik. Other prominent deals included an €86.2 million Series D round for Polish-Finnish ICEYE and a €55.4 million Series B round for Romanian (and UK-based) Fintech OS. 

New VC funds in the CEE region

Several new venture capital funds were also launched in Q2 2024, further boosting the ecosystem. Bucharest-based Early Game Ventures launched a €60 million Fund II to support early-stage startups, Polish Radix Ventures closed the first €41 million of its €60 million deeptech fund, and a UVCA (Ukrainian Venture Capital Association) opened a $300 million fund to support Ukraine’s private equity and tech sectors. 

What is more, Hungarian and US-based Interactive Venture Partners kicked off its €50 million inaugural fund and Prague-based KAYA VC made a close on its fifth €80 million fund to support Slovak, Polish, and Czech startups.

Global and European funding trends

Globally, venture capital funding reached $79 billion in Q2 2024, marking a 16% increase from the previous quarter. Notably, for the first time in a decade, Europe outpaced Asia, securing $16 billion (up 31% from Q1), while Asian startups faced challenges due to US-China tensions. Europe’s leading sectors were AI (€3.3 billion), fintech (€3 billion), and sustainability (€2.5 billion), with AI emerging as the top industry.

Dig deeper with Vestbee’s full report

For a deeper dive into the trends shaping Central and Eastern Europe’s venture capital landscape, including detailed analysis and data on sectoral performance and regional investment, access Vestbee’s full VC Funding In CEE Report Q2 2024.

Follow Vestbee for quarterly updates and insights into the CEE startup ecosystem.

source: Vestbee